In the third and fourth sessions of
the resumed Third PrepCom for the Financing for Development (FfD)
process, delegates gathered for a day of formal and informal
consultations. In the morning session, delegates heard special
presentations and then continued with general discussion. Informal
consultations on sections one and two of the Draft Outcome began in the
afternoon.

SPECIAL PRESENTATIONS

At 10:10 am, Co-Chair Jacoby convened
the PrepCom and announced presentations from two speakers. UN High
Commissioner for Human Rights Mary Robinson condemned the September 11th
attacks as crimes against humanity and welcomed the UN’s unprecedented
spirit of cooperation in combating terrorism. Calling for increased
resources for development, she contended that financing for development
is the best investment to ensure security for all. She underscored the
need for democracy, the rule of law, good governance and respect for
human rights, and expressed concern that a human rights framework is
"currently absent" in the Draft Outcome.

Angela King, UN Assistant
Secretary-General and Special Adviser on Gender Issues and the
Advancement of Women, detailed links between gender issues and the FfD
process and urged delegates to include gender perspectives. She
emphasized the increasing number of economists demonstrating that
macro-economic policies and institutions lacking a gender perspective
are not economically effective.

DRAFT OUTCOME

During general discussion, the US
called the right to development an illusion, because development can
only be earned and not given from outside. He stressed that basic
resources must come from within countries, and outlined three
fundamental prerequisites for development: peace, freedom, and
capitalism. He commended the capitalist model, in its different forms,
as the only model that works. The goal of the FfD process, he claimed,
should not be to negotiate changes in the system but to integrate
countries into it. Urging that the Conference’s primary document
should be a one-page political declaration expressing will and
commitment, he underscored continuous dialogue with all stakeholders,
including existing international institutions, the private sector and
NGOs. He concluded that delegates cannot negotiate development, but can,
together, explore how to finance it.

SAMOA, on behalf of the Alliance of
Small Island States (AOSIS), defined the FfD process as an opportunity
to address disparities of income and wealth and cure conditions of
poverty. He also noted priority areas with cross-sectoral implications
for SIDS, including capacity and institution building. AUSTRALIA
expressed disappointment in the Draft Outcome’s lack of focus on
national policies. Calling for a new draft, she emphasized, inter
alia: creating environments for sound domestic policies that attract
international capital flows; an open trading system and multilateral
trade negotiations; greater recognition of the role of ODA without
unrealistic increases; and implementation of the Heavily Indebted Poor
Countries (HIPC) initiative. CANADA cautioned against duplication of
efforts and attempting consensus on issues where no consensus exists. He
supported concrete proposals enabling countries to expand development
initiatives, develop a sense of ownership and make international aid
more effective.

The LAO PEOPLE’S DEMOCRATIC
REPUBLIC, on behalf of the group of 30 landlocked developing countries,
noted that these countries’ geographic handicaps make them less
attractive for foreign investment. He emphasized the negative effects of
high transport costs on economic and social development. ZAMBIA stated
that domestic policies alone are not sufficient for development, and
drew attention to trade barriers imposed by developed countries. Noting
shared responsibilities, she called for: flexibility on debt financing,
meeting ODA commitments, and conflict resolution. BANGLADESH, on behalf
of least developed countries (LDCs), highlighted poverty eradication and
called for massive redirection of resources to the LDCs. He emphasized
international commitments on capacity building and technical assistance,
and the need to strengthen non-discrimination and transparency in
international trade.

The DOMINICAN REPUBLIC stated that
development is essentially a domestic task, and stressed national
responsibilities in fighting corruption and tax evasion. He suggested
the Draft Outcome include, inter alia: a chapter on the global
economic recession and direct references to the WTO negotiating process.
He supported reinventing conditionalities and discontinuing barriers to
developing country exports. Algeria asked the PrepCom to recognize
responsibilities assumed by developing countries in promoting
development. He stressed commitment to, inter alia, fulfilling
ODA agreements; reducing special treatment for certain African
countries; and gaining a better understanding of how "rich
countries" assess the needs of LDCs. Belarus asked the PrepCom not
to "sweep away all the good things" in the Draft Outcome. He
said that LDCs cannot make contributions to global development, and
proposed that the PrepCom focus on disparities in countries’
capabilities.

Acknowledging that elements of the
Draft Outcome are controversial, PERU called upon the PrepCom to achieve
balance. He proposed focusing on human rights and poverty eradication;
"meshing" the public and private sectors; and fostering FDI.
Cuba pointed out that recent events have underlined
"interdependence," however a "polarization of
benefits" continues to exist. He called peace vital for development
and maintained that the FfD process is an opportunity to: spur the flow
of international funds; create better access to markets; relieve
external debt; bring developing countries into decision-making; address
systemic issues; and combat poverty. NEW ZEALAND focused on five areas
of the Draft Outcome needing further attention: more innovative use of
ODA; international cooperation between development and financing
agencies; improving conditions for developing country participation in
global trade; meeting the needs of SIDS; and stakeholder-driven reforms
of international institutions.

The Organization for Economic
Cooperation and Development (OECD) stressed its commitment to the goal
of achieving globalization benefits for all and willingness to work with
the UN. NEPAL supported the statement on landlocked countries and
emphasized the importance of coherence in economic policy frameworks. He
identified challenges such as widening resource gaps in developing
countries and stressed the need for flexibility and ownership in efforts
to untie aid. The UN Development Programme (UNDP) underscored its
commitment to Conference objectives and asked for directives on how it
can assist in reaching these. He highlighted the importance of, inter
alia: strengthening global solidarity and the operational activities
of the UN at the national level.

BRAZIL supported realistic demands on
stakeholders and noted a lack of consistency between speech and practice
in some developing countries with regard to creating a fair
international development environment. BURUNDI stressed the
interdependence of all relevant issues, including increases in ODA and
debt relief to reduce poverty. He called for doubling ODA levels;
maintained good governance, peace and democracy are key to achieving
sustainable development; and asked the international community to
support the African Initiative. The G-77/CHINA stressed the need for a
substantive outcome and called for following the PrepCom’s original
task of shaping the Draft Outcome proposed by the Facilitator.

In the afternoon, the World
Association of Cities and Local Authorities expressed concern for the
lack of reference to local authorities in the Draft Outcome and the FfD
reports. He called local support critical when considering taxation,
sources of finance, corruption, and housing and urban development. Sudan
contended developing countries must be well-represented in the FfD
process, and requested the UN system to support this participation.

Co-Chair Ahmad summarized the formal
segment of the PrepCom by stating that everyone is striving for common
ground. He clarified that developed countries expect developing
countries to promote: reform, governance and the rule of law, investment
in the social sector, poverty eradication programs, environmental
security, and macro-economic stability through fiscal discipline.
Developing countries expect developed countries to: make the global
trade regimes transparent and equitable, refrain from using
countervailing duties, refrain from linking trade to social issues,
reduce the debt burden, and support capacity building. The PrepCom then
commenced informal consultations on the Draft Outcome.

SECTIONS ONE AND TWO: In
section one, on inclusive and equitable globalization, the G-77/China
proposed that the PrepCom substitute the phrase "global economic
system" for "globalization." In paragraph one, he
proposed adding elements on social justice and poverty eradication along
with general references to development and governance. He also suggested
adding subparagraphs on transparency and predictability to paragraph
four, on the principles of global economic and social governance. In
section two, on leading actions for confronting FfD challenges, he
highlighted linkages between domestic policies for mobilizing resources
and the external environment, and the need to enhance global
partnerships in order to support regional partnerships. He expressed
reservations on a reference to domestic resources as a foundation for
self-sustaining development, objected to listing concrete policies for
good governance, and suggested adding the concept of institutional
development. He supported references to a "responsible"
business sector and to "sustained" instead of
"sustainable" investments and economic growth.

In section two, the EU emphasized
national responsibilities for mobilizing resources, capacity building
and maintaining the rule of law. He asked that references to domestic
responsibility for good governance be mainstreamed throughout the text,
and suggested adding references to capital flight, public-private
partnerships and microcredit policies. He also stressed the importance
of addressing the root causes of corruption and reforming state-owned
enterprises. Noting global objectives to address the needs of the
poorest, the EU stated that poverty reduction is the overall objective
in resource mobilization, and expressed dismay that investment in social
sectors such as education and health is only briefly mentioned.

Supported by the REPUBLIC OF KOREA and
BRAZIL, NORWAY proposed that language on national and international
efforts in the chapeau of section two be incorporated into section one.
He also proposed adding references in section two to vulnerable groups,
conflict resolution, participatory approaches, microfinance and capacity
building. The IMF expressed disappointment that a better balance could
not be found with regard to national and international actions. He said
that the FfD process should harness support for Millennium Summit goals
and highlighted, inter alia, IMF initiatives in technical
assistance. JAPAN stressed the need for short, concrete declarations in
discussions on the Draft Outcome. MEXICO stated that: a conceptual
discussion should emphasize ideas rather than language; the debate
should focus on finance; and globalization must be discussed although it
is not the primary concern of FfD.

The REPUBLIC OF KOREA called for
reconsideration of conceptual approaches in section one, stating that
paragraph two, on polarization, was too "radical," and calling
for a redefinition of equity in paragraph four. In section two, he
supported reference to human rights and opposed reference to migrant
workers. BRAZIL suggested further defining global public goods in
section one and good governance in section two, and generally agreed
with language on corruption measures. In section one, CHINA supported
the concepts of reforms in trade and monetary regimes, and proposed
references to transparency and common but differentiated
responsibilities. In section two, he emphasized, inter alia, that
mobilization of domestic resources should be accompanied by an enabling
environment and combined with efforts to establish a new economic order.

NEPAL said that managing expenditures
and enhancing revenues are prerequisites for a sound macro-economic
framework and financial sector management. He proposed reworking
paragraphs seven to 10 to better reflect the mobilization of domestic
financial resources. Guatemala urged the UN not to encroach on the
mandates of the Bretton Woods Institutions, and specified that financing
is merely a tool for achieving development. PERU said development cannot
be divorced from globalization, and highlighted the principles of
transparency and accountability because of their centrality in sound
governance. He stressed, inter alia, the need to address capital
flight and to take cooperative action to combat corruption.

IN THE CORRIDORS

On day two of the PrepCom, different
quarters expressed widely divergent views on the surprisingly tough
statement of one key player, who had been expected these days to be in a
more conciliatory mood. Power brokers in a major negotiating bloc
shrugged off what they called the tone of "disrespect."
Whatever the comments on the Draft Outcome, they said, negotiations
await...

THINGS TO LOOK FOR TODAY

PLENARY: Delegates
will meet in Conference Room 2 at 10:00 am to continue discussing the
Draft Outcome document. In the morning, President Lennart Bï¿½ge of the
International Fund for Agricultural Development will speak on behalf of
his agency, the World Food Programme, and the Food and Agriculture
Organization. The PrepCom will then continue discussing the Draft
Outcome document.

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